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Can a Member of Local Bank Board Serve on the Board of a Hospital Service District?

According to the Louisiana Board of Ethics a bank board member can serve on the board of directors for a hospital service district. See La Ethics Opinions 2002-094 and 2002-197, relying on La R.S. 39:1233.1.

In Ethics Opinion 2002-094, the Police Jury of Natchitoches Parish requested an advisory opinion as to the propriety of the Natchitoches Parish Police Jury appointing a person to the Natchitoches Parish Hospital Service District Board who was a major stockholder and who also served on the board of a bank that conducted business with the hospital.

The Board of Ethics noted that the Code of Governmental Ethics would normally prohibit an appointed hospital service district board member from serving as a director of a bank that does business with the hospital service district. See La. R.S. 42:1111(C)(2)(D). However, the Board of Ethics stated that the provisions of La. R.S. 39:1233.1 would apply. That statute allows a member of a local depositing authority to serve as an officer, director, or employee of a bank that has a business relationship with the depositing authority if the member recuses himself from participating in matters involving that bank and files a disclosure statement with the Board of Ethics within 15 days from the date of such recusal. The Board of Ethics considered the Natchitoches Parish Hospital Service District Board to be a local depositing authority.

The Natchitoches Parish Police Jury subsequently appointed the bank member to the Natchitoches Parish Hospital Service District board. Following his appointment, the board member requested a follow-on advisory opinion regarding whether, as a member of the Natchitoches Parish Hospital Service District, he could also serve as a member of the local bank’s board of directors. See Ethics Opinion 2002-197. Affirming its original opinion, the Board of Directors concluded that no potential Ethics Code conflicts were presented by that individual’s membership on both boards as long as the individual continued to recuse himself from participating in matters in which the bank has a substantial economic interest and filed disclosure statements pursuant to La R.S. 39:1233.1.